➤ US mulls currency pact with China, sales to Huawei.
➤ UK economy unexpectedly shrinks in August.
U.S. equities were flat as the much-anticipated meeting between the U.S. and China was due to begin today amid uncertainty regarding the outcome of those talks.
The S&P 500 was 0.03% higher around 9:30 a.m. ET. European bourses were mixed, with Germany's DAX declining 0.1% and France's CAC 40 rising 0.3%. The FTSE 100 was up 0.1%.
The South China Morning Post reported that the U.S. and China made no progress, during deputy-level trade talks earlier in the week, on issues at the center of the trade dispute and that the Chinese delegation may cut its stay in the U.S. short.
Separately, Bloomberg News reported that the U.S. was considering a currency pact with China as part of an interim trade agreement that could avert potential tariff increases on Chinese goods.
Unnamed sources told The New York Times that the U.S. could soon allow U.S. companies to sell nonsensitive goods to Chinese telecom equipment maker Huawei Technologies Co. Ltd.
The raft of trade headlines comes as China was reportedly mulling increasing its U.S. farm imports as part of trade-related concessions.
"Just getting Chinese companies to boost their imports of things like soybean plus pork isn't going to cut it for [U.S. President Donald Trump]," said David Madden, market analyst at CMC Markets UK. "Concerns about national security in addition to intellectual property rights are the major issues for the U.S., and these are likely to be the longer-term sticking points."
It remains to be seen whether a partial trade pact would be acceptable to Trump, who favors a whole agreement, according to MUFG Bank currency analysts Lee Hardman and Fritz Louw.
In Asia, the Shanghai SE Composite advanced 0.8%, Japan's Nikkei 225 rose 0.5% and Hong Kong's Hang Seng ticked up 0.1%.
In currencies, the euro climbed 0.5% versus the dollar ahead of the European Central Bank's September minutes. Eurozone finance ministers agreed on some key details of a common budget, though they could not finalize how it should be financed.
Sterling strengthened 0.2% against the U.S. currency as data showed that the U.K. economy unexpectedly contracted 0.1% in August. The Japanese yen was up 0.2% versus the dollar.
The dollar index lost 0.3%. Minutes of the U.S. Federal Reserve's September meeting gave few clues on whether the central bank was leaning toward easing policy again at its Oct. 29-30 meeting, though that is what markets currently expect.
The yield on 10-year Treasurys gained 3 basis points to 1.615%, after U.S. annual core inflation came in at 2.4% year over year in September, unchanged from the prior month. The 10-year German Bund yield was up 5 basis points to negative 0.493%.
Among commodities, Brent crude oil jumped 1.1% to $58.98 per barrel on the ICE Futures Exchange. Gold slipped 0.3%.
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The day ahead:
12:15 p.m. ET — U.S. Fed's Neel Kashkari speaks
12:30 p.m. ET — U.S. Fed's Mary Daly speaks
2 p.m. ET — U.S. Treasury Budget
3:30 p.m. ET — Daly speaks
4:30 p.m. ET — U.S. Fed balance sheet
4:30 p.m. ET — U.S. money supply
5:30 p.m. ET — U.S. Fed's Loretta Mester speaks
